My husband was given his grandpa's business and now I'm not sure if it’s a good thing... looking for advice

My husband’s grandpa transferred his business to him, but the person who was doing the taxes and books was very inconsistent. The tax person isn’t registered through the board of accountants in Ohio and has bad reviews.

Now that my husband is the owner, he took the accounts to a new place. They have been looking through years of taxes that weren’t paid and many penalties. This is stuff the grandparents paid the old tax person to handle, but it wasn’t done.

He has a lawyer and a new CPA, and they’ve both tried reaching out to the old person, but they’ve had no luck getting the needed info. The old person is ignoring everyone.

The lawyer says we shouldn’t take him to court for services that weren’t done because it was also the grandparents’ responsibility to ensure it was done. But I’m more worried about the company’s documents and information that the old person still has in their office. Also, I don’t think the lawyer is the best fit for this. He helped transfer the business and a house into my husband’s name, but this feels more like a criminal or fraud issue.

Sorry if this sounds confusing, I work third shift and haven’t slept much because I’m so stressed and exhausted.

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They should’ve bought the assets and started a new LLC, that’s how this stuff usually works.

Cade said:
They should’ve bought the assets and started a new LLC, that’s how this stuff usually works.

I told my husband he should get a different lawyer before doing this, but he didn’t listen.

@Quin
He might be looking at a long time in federal prison for this.

Usually, your husband could’ve just kept some of the assets and started a new LLC with a new Tax ID, which would’ve protected him from past debts.

Aris said:
Usually, your husband could’ve just kept some of the assets and started a new LLC with a new Tax ID, which would’ve protected him from past debts.

I don’t understand why these taxes weren’t paid because they’ve made a nice yearly profit. His grandparents are offering to pay for the work that wasn’t done. They are financially well off.

@Quin
Maybe they just trusted the wrong person.

@Quin
Maybe that’s how they got so well off.

Your husband should talk to another lawyer about selling the assets to a new company. Set up a firewall with the new accountant.

You’d be isolating the old company’s tax issues, but keep in mind this could trigger an IRS audit.

Yep, take over the business but get a new EIN so you’re not responsible for things you don’t know about.

Ellery said:
Yep, take over the business but get a new EIN so you’re not responsible for things you don’t know about.

It’s already in his name. Is there a way to fix this now?

Did your husband or his grandpa have a ‘hold harmless’ clause? This would mean that any problems before the business transfer (like unpaid taxes) are the grandpa’s responsibility, and anything after the transfer is your husband’s. This would make things easier.

Also, if you don’t think the lawyer is the right fit, maybe that’s a sign. You wouldn’t ask a football player for ice skating advice, right?

When someone does your taxes or bookkeeping, you have a responsibility to do basic checks on their work. You don’t have to be a tax expert, but you should at least make sure things look correct.

If the new CPA is digging through old records, they’re probably doing it to find mistakes so they can point out why you should’ve hired them instead. Their goal should be to help you minimize the damage. Are the taxes just not paid, or did the old accountant take the money? If the business lost money in some years, there might not be any taxes owed.

@Keaton
I didn’t hire the lawyer, it’s the one my husband’s grandparents hired. I told my husband to get a lawyer for himself, but he didn’t listen. I wasn’t involved in this situation until now. These are just things my husband mentioned in passing, and the lawyer brought up when he transferred the house into both of our names. Thanks for your response, I’ll show him this!

I’ve been saying for years that I thought the old tax person was doing something shady and taking advantage of his grandparents. They’re in their 90s, very well off, and just tired of everything at this point.

You might want to look into hiring a ‘forensic accountant.’ They specialize in uncovering fraud and hidden financial issues. Even if you don’t hire one, talking to them for advice could help.

Honestly, it’s hard to tell if the current accountant or the old one is at fault. It’s strange that the new one is going through old records at your expense. I’d guess that both accountants aren’t doing you any favors. You’re probably dealing with poor record keeping, too.

You should know that two different accountants can look at the same records and come up with different answers about how much is owed.

Just try to get through this the best you can. It’s not the first time someone’s dealt with a mess like this and it won’t be the last.

Sounds like grandpa was getting scammed by the old accountant.